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Canada: Foreign Investments Subject to Enhanced Scrutiny Amid COVID-19

April 19, 2020

On April 18, the Canadian Minister of Innovation, Science and Industry (Minister) issued a statement announcing that certain foreign investments will be subject to enhanced scrutiny under the Investment Canada Act (ICA) during the COVID-19 pandemic.


  • This new policy will apply to foreign investments in public health, the supply of critical goods and services, or that are undertaken by investors with ties to foreign governments.
  • Foreign investors are being encouraged to file notifications at least 45 days prior to closing.
  • This enhanced scrutiny will apply until the economy recovers from the effects of the pandemic.


To ensure that foreign investments do not introduce new risks to Canada’s economy or national security, including the health and safety of Canadians, certain foreign investments into Canada will be subject to enhanced scrutiny under the ICA. This new policy reflects the fact that Canadian businesses have seen significant declines in their valuations, which may lead to opportunistic investments and the government’s recognition of the importance of domestic control over critical goods and services.

In particular, attention will be focused on any foreign direct investments in Canadian businesses or the establishment of new Canadian businesses that are related to public health or the supply of critical goods and services to Canadians or to the government. Special scrutiny will be applied to any foreign investments by state-owned investors or investors considered to be closely tied to, or subject to direction from, foreign governments.

The concept of critical goods and services is likely to be broadly interpreted by the Minister. In this regard, it is notable that the government has identified critical infrastructure as covering 10 sectors (energy and utilities, information and communication technologies, finance, health, food, water, transportation, safety, government, and manufacturing) and has published an extensive but non-exhaustive advisory list of essential services and functions in the context of COVID-19.

This enhanced scrutiny may involve the Minister requesting additional information or extensions of review timelines as authorized by the ICA and will apply until the economy recovers from the effects of the COVID-19 pandemic.

During these unique circumstances, it is important for foreign investors to consider the ICA’s review process in the early stages of investment planning, particularly if contemplating an investment that may be subject to enhanced scrutiny. To obtain certainty that an investment will not be subject to a national security review, foreign investors should consider whether to file a notification at least 45 days in advance of closing.

If you have any questions, please do not hesitate to contact your usual Blakes contact or any member of the Blakes Competition, Antitrust & Foreign Investment group.

Please visit our COVID-19 Resource Centre to learn more about how COVID-19 may impact your business.